Written by Ellina Badri & Melody Song
Wednesday, 24 March 2010 07:03
KUALA LUMPUR: Blue chips are expected to extend their gains on Wednesday, March 24, underpinned by the rally on Wall Street as the Dow and the S&P 500 hit 18-month highs.
The rally on Wall Street was led by the tech, industrial and materials sectors. The Dow Jones industrial average rose 102.94 points, or 0.95 percent, to 10,888.83. The Standard & Poor's 500 Index gained 8.36 points, or 0.72 percent, to 1,174.17. The Nasdaq Composite Index shot up 19.84 points, or 0.83 percent, to 2,415.24.
Meanwhile, investors will also await details from the Bank Negara Malaysia annual report which will be released at 6pm Wednesday. The details will be on the health of the economy and banking sector and steps to further strengthen the financial services sector.
Economists expect GDP growth of between 4.5% and 5.1% this year after the economy grew 4.5% in the 4Q of last year.
Stocks to watch include EON CAPITAL BHD [] (EONCap), MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), GLOMAC BHD [] and George Kent (Malaysia) Bhd. Also in focus will be Ho Hup CONSTRUCTION [] Co Bhd, BINA PURI HOLDINGS BHD [] and SOUTHERN ACIDS (M) BHD [].
EON Capital Bhd (EONCap) may be in the spotlight following approval from Bank Negara Malaysia for the resignation of its four independent directors, which sources say two of which may be delayed as the resignation of all four would run foul of the central bank’s rulings.
It has been reported that major shareholder Rin Kei Mei is another step closer to reviving HONG LEONG BANK BHD []’s takeover offer at RM7.10 a share. There has also been speculation that private investors from Abu Dhabi are interested in buying Rin’s stake in the bank, offering to pay as much as US$400 million, according to a report in The Edge Weekly.
CIMB Research has upgraded Malaysian Airline System Bhd (MAS) to outperform from underperform, with a target price of RM3, based on six times the national carrier's calendar year 2012 core earnings per share (EPS), revised from RM1.95 earlier.
Glomac reported an 11% year-on-year rise in net profit to RM10.65 million in the third quarter ended Jan 31, 2010 (3QFY10), despite lower revenue, due to higher contributions from ongoing developments.
George Kent is also in focus following a 40.71% rise in its net profit for the fourth quarter ended Jan 31, 2010 due to stronger sales from its meters and manufacturing divisions in addition to increased engineering construction activities. The company also posted stronger revenue of RM41.27 million from RM26.75 million a year earlier.
In Ho Hup, Tan Sri Tong Yoke Kim @ Tong Kiot Seng, who controls 19.27% of Bina Puri Holdings Bhd via a privately held entity, has emerged as a substantial shareholder in Ho Hup with a 7.28% interest.
Southern Acids saw its net profit rally strongly in its third quarter ended Jan 31, 2010 from a net loss of RM15.31 million a year earlier due to increasing demand and favourable prices of its oleochemical products and crude palm oil. Its revenue in 3Q10 also more than doubled y-o-y to RM118.05 million.
KUB MALAYSIA BHD [] announced it had accepted an RM16.23 million three-year contract from TELEKOM MALAYSIA BHD [] for the supply and delivery of Wireless ADSL2+ Modems, which is expected to begin contributing positively to KUB’s earnings for the financial year ending Dec 31, 2010.